`Golden Ticket' Visas for Investors Need Overhaul, Lawmakers Say

(Bloomberg) -- A visa program that offers wealthy foreigners legal residence in the U.S. if they invest in projects that create jobs needs to be overhauled or eliminated because of concern over fraud and threats to national security, senators from both parties said in a rare moment of bipartisanship.

Judiciary Committee Chairman Chuck Grassley of Iowa was joined by Democrats and other Republicans at a hearing Tuesday in faulting a program known as a “golden ticket” that allows foreigners to reside in the U.S. if they invest at least $500,000 and create at least 10 jobs.

Congress created the EB-5 program in 1990 to boost economic development, especially in low-income and rural areas. The visa program has become wildly popular with Chinese investors, and real estate developers have been the main beneficiaries of their cash. There’s a limit of about 10,000 EB-5s per year.

Grassley said the program is rife with "cases of fraud, corruption and threats to national security" and that he’s been working for years to try to revamp it. He said his efforts have been thwarted by supporters of the program.

U.S. residents have been charged with using money intended to create jobs for personal gain, Grassley said. He also said Iranian operatives tried to infiltrate the U.S. using the program and that Chinese nationals claimed they were fraudulently coerced into investing in a real-estate project.

Senator Dianne Feinstein of California, the Judiciary Committee’s top Democrat, said it’s not fair to sell visas to the rich while others struggle to come to the U.S. “It’s wrong to sell American citizenship,” she said. “The wealthy can cut to the front of the line. This on its face is fundamentally un-American.” Feinstein also said the program has led to fraud.

At the hearing, L. Francis Cissna, director of U.S. Citizenship and Immigration Services at the Department of Homeland Security, acknowledged abuse and called for changes such as site checks and improved vetting.

The program allows foreign investors to reside legally in the U.S. if they put $1 million into a new commercial enterprise that creates at least 10 jobs. If they make the investment in a “targeted employment area” -- either in a rural community or one with high unemployment -- the minimum investment is lowered to $500,000.

The Kushner family used EB-5 funds to build the Trump Bay Street apartment tower in New Jersey, which opened in November 2016 right before Jared Kushner’s father-in-law, Donald Trump, was elected president. Last year, Kushner’s sister was criticized for mentioning the family’s Trump ties while pitching wealthy Chinese to get visas by investing in another Kushner apartment complex.

There are reports that the U.S. Securities and Exchange Commission and federal prosecutors in New York issued subpoenas to Kushner Cos. last year seeking details about its use of the EB-5 program.

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